By Melissa Luz T. Lopez,
Senior Reporter

THE GOVERNMENT will be able to collect around P21 billion from Mighty Corp. this month, the Department of Finance (DoF) said, following the approval given by the competition regulator for the cigarette firm’s acquisition.

Finance Secretary Carlos G. Dominguez III said the embattled cigarette producer will be paying its outstanding tax liabilities later this month, while some P500 million will be settled by April 2018 representing dues for this year.

“By September, we will start to get the bulk of it,” Mr. Dominguez told reporters last week, referring to the settlement offered by the Bulacan-based firm.

Mighty’s tax settlement results from its decision to pay a penalty rather than face multiple charges relating to alleged tax evasion and the use of fake tax stamps for its cigarette products, as discovered after the Bureau of Customs raided several warehouses around the country.

The cases filed against Mighty are worth a total of P37.88 billion, according to the DoF.

The P25-billion settlement offer is said to cover P3.5 billion in unpaid excise taxes, and P21.5 billion worth of internal revenue taxes of the company and its shareholders.

In July, Mighty paid P3.44 billion to the Philippine government as an initial settlement. It committed to pay P21.5 billion more once it closes the sale to Japan Tobacco International (JTI), which was priced at $936 million or P46.8 billion.

Last week, the Philippine Competition Commission approved JTI’s acquisition of Mighty Corp. and Wong Chu King Holdings, Inc. after the body found that the sale would not lead to a “substantial lessening of competition” in the market.

“We insisted that the bulk of the money be in Landbank… We want to make sure we [get] ours first… that we get paid first before anybody gets paid,” Mr. Dominguez said.

The DoF said that the closing of the deal between Mighty and JTI may occur this week, which would facilitate the transfer of funds.

Mr. Dominguez said the Executive branch plans to use the tax windfall for rehabilitation efforts in Marawi City estimated to cost P30 billion, together with an additional P5 billion in value-added tax from Mighty’s sale.

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